中国汽车：国内市场挑战，海外市场强劲——Q1回顾后的车型更新
Chinese Autos: Challenging home market, Strength abroad —Model updates following Q1 review Following a review of Q1 performance, we have updated our estimates and price targets forXiaomi, Geely, Great Wall, SAIC, and GAC. Eunice Lee, CFA+852 2123 2606eunice.lee@bernsteinsg.com Q1 was challenging for the Chinese auto sector.Industry wholesale volume declined7.5% yoy, driven by a 17.3% yoy drop in domestic demand, while exports grew 63.5% yoyand provided key support. Weak domestic demand mainly reflected a high comparisonbase, subsidy rollbacks, and earlier demand pull-forward. The rollback of subsidies and a5% EV purchase tax hike weighed on EV sales in particular, which fell 27% yoy in 2026 2M,with EV penetration at 37%. Performance improved in March, with EV sales down 18% yoyand penetration rebounding to 54%, compared with 53% in FY 2025 and 58% in Q4 25.The recovery reflects consumer adaptation to higher taxes, an acceleration in new modellaunches, and higher gasoline prices.Overall, Chinese OEMs’ Q1 performance wasmixed.Companies with stronger overseas exposure outperformed, though they also facedFX headwinds. RMB strength in early 2026, following a weaker USD, resulted in FX lossesversus FX gains in Q1 2025, highlighting the growing importance of proactive FX hedging. Ethan Xu+852 2123 2634ethan.xu@bernsteinsg.com Xiaomi: Outperform, PT HK$43.00(Old: HK$46.00).Xiaomi has yet to report Q1earnings, expected in late May. Following a review of recent performance,we loweredour Q1 revenue forecast, mainly reflecting weaker IoT due to high comps and taperingsubsidies. EV estimates were also cut, as Q1 deliveries fell short on the back of productionswitchover to the new SU7 and softer YU7 momentum. That said,gross margins areproving more resilientthan previously expected. Q1 smartphone gross margin isestimated at 9.5-10%, up from 8.3% in Q4, despite higher memory costs, supported byproduct mix optimization. ASP is expected to rise to RMB1,300 (+7% yoy, +11% qoq).Higher margin look sustainable from premiumization, with upside to FY guidance (c.8%)if memory prices stabilize. IoT gross margin is estimated to approach 25%, reflectingthe company’s focus on margin over market share, alongside rising overseas exposure.EV gross margin likely contracted to c.20% in Q1 due to weaker deliveries and higherpromotions, which weighed on ASP. Overall, we estimate Q1 revenue at RMB97bn (-13%yoy, -17% qoq) and adjusted net profit at RMB5.5bn.Looking ahead, investor interestis likely to remain muted until clearer evidence emerges of memory pricing peaking orstabilizing. Nonetheless, Xiaomi continues to make progress in premiumization, overseas,and EVs: the new SU7 has exceeded 70k locked-in orders as of May 2, April deliveriessurpassed 30k, and upcoming launches—including the YU7 GT in late May and a full-sizeEREV SUV in Q3—should support recovery. We lower our PT to HK$43.00 after lowering2026/27 EPS by 3%/4% to RMB1.05/ 1.75. Our SOTP valuation implies 22× 2027E P/E. Geely: Outperform, PT HK$25.00(Old: HK$22.00).Geely delivered solid Q1 results,supported by a stronger Zeekr and overseas mix, which we expect to continue drivingmargin expansion through 2026. That said, we have turned more cautious on volumesamid softer domestic demand and trimmed our 2026 volume forecast to 3.35mn units(+11% yoy) from 3.45mn previously. In 2026 4M, wholesale shipments reached 945k units(+1% yoy), with domestic volumes down 20% yoy and exports up 154% yoy to 286k units.Assuming exports meet the 750k-unit full year guidance(… continue on next page) —where confidence is high given the low base and rapid channel expansion—domesticvolumes would need to be c.2.6mn units, implying almost flat yoy growth and requiringa strong demand pickup over the remainder of the year. While volume guidance may bemissed due to domestic softness, margin expansion from product mix improvement shouldmore than offset lower volumes. As a result, we raise our price target to HK$25.00 afterincreasing 2026/27 EPS by 10%/3% to RMB1.82/2.26, apply 10x 1-yr forward P/ Emultiple. Great Wall, Market-Perform, PT HK$13.00(Old: HK$16.50).Great Wall delivered mixedQ1 results, with revenue of RMB 45.1bn (+12.7% YoY) driven by shipment growth and ASPexpansion, while gross margin improved to 18.5% on a stronger overseas mix. However,net income came in at RMB 945mn, -46.0% yoy and -23.2% qoq, primarily due to FXimpact. Exports rose 43% yoy to 130k units and accounted for 48% of sales, with greaterdiversification into LATAM offsetting lower Russia exposure. However, we are cautious onthe export outlook given the company’s heavy ICE exposure, potential demand pressurefrom higher oil prices, and Middle East geopolitical risks. Reflecting overseas risks anddomestic pressure with lagging EV transition, as EV mix fell to 19.6% in Q1, we cut ourprice target to HK$13.00 after lowering 2026/27 EPS by -28%/-24% to RMB1.21/1.40,applying 8× 1-yr forward P/E. SAIC, Market-Perform, PT RMB15.00
